Direct Labor Market Effects of Unemployment Insurance

[Excerpt] With high current interest in unemployment and inflation, policy makers and academicians have begun to reassess the impact of unemployment insurance on the labor market. Some ask whether high unemployment rates are partly the result of an addition to the labor market of workers with a high propensity for unemployment. Others see unemployment as being partly caused by an increasing tendency for workers to refuse “bad” jobs. Still others concentrate on the factors that lead to greater labor turnover and flows of workers through the labor market. Consequently, there has evolved a “new view” of unemployment, which considers more than the familiar concepts of deficient demand and structural and seasonal unemployment. It also pays attention to job search processes and the instability of certain jobs and certain workers. Based on this “new view,” this paper seeks to gauge the impact of the American system of unemployment insurance (UI) on the labor market. The evaluative issues are: the efficiency of UI as a tool for income maintenance, the extent to which UI leads to greater unemployment, and UI’s income distribution effects

Jobfinding and wages when longrun unemployment is really long : the case of Spain

This paper uses the "Encuesta de Condiciones de Vida Y Trabajoll (ECVT)·· a survey of the labor force activity of over 61,000 persons in Spain in 1985 when unemployment exceeded 20%--to examine the effect of unemployrnent insurance (UI) and family status on longrun joblessness. It finds that (1)duratían of joblessness 1s 50me 30% longer for those eligible for UI benefits than for those ineligible for UI; (2) the longterm unemployed are disproportionately secondary workers for whom the family serves as a form of welfare; (3) hazard rates linking the chances of jobfinding to duration of unemployment in the 1981-85 period of massive joblessness did not decline with duration; (4) the length of unemployment spells reduces wages moderately but has huge effect on the probability that re-employed workers take secondary sector jobs; (5) the UI eligible earn more and are more likely to gain regular full-time jobs than those ineligible for UI, congruent with the additional months of Job search associated with UI. The estimated effects of duratían on the hazard and on earnings are consistent with the implications of labor supply and search analysis but not with the view that long unemployment spells create a class of unemployables. Our results imply a sizeable reduction in longterm unemployment with economic recovery

On the informational content of wage offers

This article investigates signaling and screening roles of wage offers in a single-play matching model with two-sided unobservable characteristics. It generates the following predictions as matching equilibrium outcomes: (i) “good” jobs offer premia if “high-quality” worker population is large; (ii) “bad” jobs pay compensating differentials if the proportion of “good” jobs to “low-quality” workers is large; (iii) all firms may offer a pooling wage in markets dominated by “high-quality” workers and firms; or (iv) Gresham’s Law prevails: “good” types withdraw if “bad” types dominate the population. The screening/signaling motive thus has the potential of explaining a variety of wage patterns

The Impact of Demographic and Individual Heterogeneity on Unemployment Duration: A Regional Study

Since 1992, claimant unemployment has fallen by almost 1½ million and on the ILO definition by nearly 1 million. Despite this fall, changes to the headline rate of unemployment masks a far more complex pattern of the UK?s unemployment experience. For many individuals unemployment is a short-lived affair. For others, the risk of repeated or prolonged periods of unemployment is high. Repeated or prolonged unemployment spells may reflect occupational choice or poor employability brought about by poor skills and/or repeated labour market exclusion. They may also reflect a lack of employment opportunities concentrated in specific geographical areas. Both facets amount to a significant detachment from work. They also contribute to recent growth in the level of non-working households and low pay. The differential risk of unemployment across UK regions and population sub-groups is well recognised. However, the extent to which residential location and individual heterogeneity contribute to the duration of unemployment is more difficult to discern. This paper investigates the impact of individual heterogeneity and regional influences on unemployment duration utilising cross-section microeconomic data drawn from a representative random survey of individual job seekers for the English County of Kent. These individual-level data are unique in that they provide information concerning the personal characteristics of job seekers, alongside direct observations of both their reservation wages and job search behaviour. The availability of such data is rare. To our knowledge, there is no existing study utilising such data at the regional level. This paper contributes to the empirical literature by analysing the extent to which individual heterogeneity and intra-regional variation in labour market opportunities impact upon the observed distribution of unemployment duration(s). In particular, the paper analyses the extent to which the duration of unemployment is determined by individual choice. This is an important issue for the formation and evaluation of policy. If individual choice is found to significantly influence the duration of unemployment then the efficacy of current microeconomic supply?side initiatives such as ?The New Deal? and other welfare to work policies is supported. The existence of regional influences, by contrast, advocates a more active role for macroeconomic demand-led management. It also supports a more integrated strategy for the implementation of urban and regional policy such as the recent creation of Frameworks for Regional Employment and Skills Action (FRESAs). Utilising an econometric model tied closely to job search theory, our results reveal that individual characteristics and related ?choice? variables? such as educational attainment, labour market mobility and job search behaviour exercise important impacts on the duration of unemployment. However, after controlling for such factors, there remain significant geographical variations. These results are robust for both males and females. Thus, the results provide new insights into the benefits of current policies aimed at increasing the employability of the unemployed.

The consumption-tightness puzzle

This paper introduces a labor force participation choice into a labor market matching model embedded in a dynamic stochastic general equilibrium set-up with production and savings. The participation choice is modelled as a tradeoff between forgoing the expected benefits of being search active and engaging in costly labor market search. The model induces a symmetry in firms’ and workers’ search decision since both sides of the labor market vary search effort at the extensive margins. We show that this set-up is of considerable analytical convenience and that it gives rise to a linear relationship between labor market tightness and the marginal utility of consumption. We refer to the latter as the “consumption - tightness puzzle” because (a) it gives rise to a number of counterfactual implications, and (b) it is a robust implication of theory. Amongst the counterfactual implications are very low volatility of tightness, procyclical unemployment, and a positively sloped Beveridge curve. These implications all derive from procyclical variations in participation rates that follow from allowing for the extensive search margin

Heterogeneous Firms in a Finite Directed Search Economy

We consider a directed search model for a finite economy with heterogeneous firms in two informational environments. In the first, the productivity of all firms is publicly observed. We prove existence of equilibria in pure posting strategies by firms and show that wage dispersion is driven by fundamentals. That is, more productive firms post higher wages and wage dispersion is absent when firms are homogeneous. When firms have heterogeneous productivities the equilibrium is not constrained efficient. In the second environment the productivity level of each firm is private information. The main results extend to this environment: Equilibria in pure strategies exist; strategies are increasing in productivity; and constrained efficiency does not obtain. When the productivity level of all firms is drawn from the same distribution, symmetric equilibria exist and the ranking of wages equals that of productivity.Directed Search, Labor Search, Market Power, Wage Differentials, Efficiency

Models and Strategies for Variants of the Job Shop Scheduling Problem

Recently, a variety of constraint programming and Boolean satisfiability approaches to scheduling problems have been introduced. They have in common the use of relatively simple propagation mechanisms and an adaptive way to focus on the most constrained part of the problem. In some cases, these methods compare favorably to more classical constraint programming methods relying on propagation algorithms for global unary or cumulative resource constraints and dedicated search heuristics. In particular, we described an approach that combines restarting, with a generic adaptive heuristic and solution guided branching on a simple model based on a decomposition of disjunctive constraints. In this paper, we introduce an adaptation of this technique for an important subclass of job shop scheduling problems (JSPs), where the objective function involves minimization of earliness/tardiness costs. We further show that our technique can be improved by adding domain specific information for one variant of the JSP (involving time lag constraints). In particular we introduce a dedicated greedy heuristic, and an improved model for the case where the maximal time lag is 0 (also referred to as no-wait JSPs).Comment: Principles and Practice of Constraint Programming - CP 2011, Perugia : Italy (2011

CMS dashboard task monitoring: A user-centric monitoring view

We are now in a phase change of the CMS experiment where people are turning more intensely to physics analysis and away from construction. This brings a lot of challenging issues with respect to monitoring of the user analysis. The physicists must be able to monitor the execution status, application and grid-level messages of their tasks that may run at any site within the CMS Virtual Organisation. The CMS Dashboard Task Monitoring project provides this information towards individual analysis users by collecting and exposing a user-centric set of information regarding submitted tasks including reason of failure, distribution by site and over time, consumed time and efficiency. The development was user-driven with physicists invited to test the prototype in order to assemble further requirements and identify weaknesses with the application

How to take into account general and contextual knowledge for interactive aiding design: Towards the coupling of CSP and CBR approaches

The goal of this paper is to show how it is possible to support design decisions with two different tools relying on two kinds of knowledge: case-based reasoning operating with contextual knowledge embodied in past cases and constraint filtering that operates with general knowledge formalized using constraints. Our goals are, firstly to make an overview of existing works that analyses the various ways to associate these two kinds of aiding tools essentially in a sequential way. Secondly, we propose an approach that allows us to use them simultaneously in order to assist design decisions with these two kinds of knowledge. The paper is organized as follows. In the first section, we define the goal of the paper and recall the background of case-based reasoning and constraint filtering. In the second section, the industrial problem which led us to consider these two kinds of knowledge is presented. In the third section, an overview of the various possibilities of using these two aiding decision tools in a sequential way is drawn up. In the fourth section, we propose an approach that allows us to use both aiding decision tools in a simultaneous and iterative way according to the availability of knowledge. An example dealing with helicopter maintenance illustrates our proposals